Audit risk vs RoMM

This topic has 1 reply, 2 voices, and was last updated 2 years ago by Kim Smith.

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May 25, 2024 at 10:55 am #705994
LuxetVeritas
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Hello, dear Sir

Hope you doing well.

I would like to ask you one thing: what is the difference between audit risk and risk of material misstatement? Some questions aka audit risks whereas others require to find risk of material misstatement.

Thank you so much in advance!
May 25, 2024 at 11:34 am #705997
Kim Smith
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This is definitely covered in the notes – if you search “audit risk model” you will find a good summary. Essentially AR = IR x CR x DR where IR x CR = RoMM

Therefore the difference between being asked for AR and RoMM is that AR requires you to consider DR also.
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